US auto sales slump in April as cars suffer – USA TODAY
Disappointing U.S. new vehicle sales in April suggested that the auto industry is receding from its breakneck pace, reducing the chances of a third consecutive record year.
Overall, the industry reported a 4.7% sales decline to 1.43 million units, according to industry tracker Autodata. Edmunds and Kelley Blue Book analysts had projected industry sales declines of 4% and 3.1%, respectively.
General Motors, Ford, Fiat Chrysler and Nissan each reported deeper-than-expected sales declines for the month. Toyota narrowly edged expectations, but it still recorded a 4.4% decline for the month, compared to a year earlier.
Slumping sales of new cars took a heavy toll — and even increased discounts couldn’t bail them out.
The worse-than-expected performance “could in fact point to a slowing auto market,” Kelley Blue Book analyst Alec Gutierrez said.
GM, Ford and Fiat Chrysler vehicle sales fell 5.9%, 7.1% and 6.9%, respectively, according to Autodata. Nissan was down 1.5%.
GM’s stock fell 2.9% to $33.20 on Tuesday, Ford Motor was down 4.4% to $10.92 and Fiat Chrysler shares reversed 4.3% to also hit $10.92.
The industry’s pace of sales was slower than expected throughout the month, said Mark LaNeve, Ford’s vice president of sales and marketing.
“We have to let the year play out,” he said. “All the underlying fundamental…indicators that drive our business are very positive. Some of the big months are still in front of us.”
Indeed, profits remain plentiful for an industry that’s operating near 2016’s record sales pace of 17.6 million vehicles.
“Even with a slowdown we’re still on the high end of what would be the 30-year norm of U.S. auto sales,” Gutierrez said.
One factor undermining profits is rising discounts, which automakers adopt to maintain market share and keep cars moving off dealers’ lots. Average incentives as a percentage of vehicle price rose to 10.5% in April, up from 9.3% in the same month a year before, according to TrueCar subsidiary ALG.
Many of those incentives are devoted to 0% financing offers on slow-selling cars and alternative fuel vehicles, Autotrader analyst Michelle Krebs said.
Small cars such as the Chevrolet Sonic and Ford Fiesta reported crushing sales declines. But compact crossovers, including the Chevy Trax, Buick Encore and Toyota C-HR, were hot. Industry research suggests that consumers are picking crossovers for additional cargo space, interior room and high vantage point, Krebs added.
Japanese automaker Subaru bucked the industry trend as its relentless hot streak continued with sales up 4% for the month, compared to a year earlier. Hyundai’s sales rose 1.3%, while its Korean sister brand Kia said its sales fell 5.6%.
Contributing: Detroit Free Press reporter Brent Snavely.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.